The Role of Employee Ownership and Employee Ownership Trusts as a Succession Tool
Employee Ownership as a Pathway to Growth and Legacy
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Employee Ownership: A Sustainable Path to Succession
Employee ownership is rapidly becoming a practical and sustainable tool for succession planning in Australia. This webinar explores how Employee Ownership Trusts (EOTs) and other employee ownership models can provide business owners with a way to exit while preserving culture, values, and long-term stability.
For medium-sized business owners and advisers, this session will outline how EOTs can support both legacy and financial outcomes, ensuring continuity and growth while engaging employees in the future success of the business.
Learning Highlights
- Understand what an Employee Ownership Trust is and how it works in practice.
- Learn why employee ownership is becoming a popular succession tool for SMEs in Australia.
- Explore how to design and structure an EOT for long-term financial and cultural success.
- Identify the tax, legal, and governance frameworks that apply in Australia.
- Gain insights into how employee ownership supports legacy, engagement, and business continuity.
Designed for Business Owners and Advisers
- Business owners looking at exit and succession options.
- Financial advisers supporting clients through succession planning.
- Accountants, lawyers, and succession planners who want to understand employee ownership structures.
- Board members and senior managers exploring strategies for business continuity.
If you are seeking a succession model that balances financial outcomes with legacy and employee engagement, this session is highly relevant.
Find Answers To Common Questions Here
Employee ownership can seem complex, with questions around how the structure works, funding, tax, and governance. To make it clearer, we’ve answered some of the most common questions business owners and advisers ask when considering Employee Ownership Trusts as a succession option.
Q1. What is an Employee Ownership Trust (EOT)?
An EOT is a trust structure that holds shares in a company on behalf of its employees. Ownership is collective, with employees benefiting from the trust rather than owning shares directly.
Q2. How does employee ownership differ from share schemes or option plans?
Traditional share schemes give individuals direct shareholdings. An EOT centralises ownership within a trust, making it simpler, fairer, and easier to manage across a broad employee base.
Q3. Why is employee ownership becoming more popular in Australia?
EOTs provide a practical succession option that keeps ownership within the business, supports legacy goals, and engages employees without the disruption of an external buyer.
Q4. Is there specific legislation for EOTs in Australia?
Unlike the UK, Australia does not have dedicated EOT legislation. However, EOTs can be structured under existing trust, corporate, and tax frameworks, including Division 83A tax concessions.
Q5. How are employees financially rewarded under an EOT?
Employees share in the profits of the business through the trust, benefiting collectively from its performance and growth.
Q6. Can an EOT provide a fair exit for the founder?
Yes. An EOT allows founders to achieve both financial value and legacy continuity, with options for upfront or staged payments depending on the plan design.
Q7. Are EOTs suitable for all businesses?
They are most effective for small to medium-sized enterprises with stable cashflow, strong culture, and owners who want to see their business legacy preserved.
Q8. How complex is it to set up an EOT?
While professional advice is required, EOTs can be designed to be straightforward, affordable, and sustainable for most SMEs.
Q9. What role do employees play in governance?
Employees benefit collectively but do not typically make day-to-day governance .decisions. A trustee oversees the trust, ensuring the interests of employees are represented.
Q10. What are the long-term benefits of employee ownership?
Businesses see improved employee engagement, cultural continuity, succession stability, and shared financial success. Founders benefit from an exit strategy that balances financial return with legacy goals.